In a time when finances become tighter, it might help when utilities remain the same.
But, unfortunately, that’s just not the case.
In fact, utilities for members of the San Isabel Electric Association, Inc. can expect a 9.5 percent increase on their bills come February.
This is the first rate hike in five years from the co-op electric association.
“I think there’s a misunderstanding on how San Isabel works,” said Reg Rudolph, San Isabel Electric Association, Inc. general manager.
“It’s comprised of two components: Power and electricity and distribution, service it provides and creates locally.
“The component that is increasing is the (wholesale) power cost from the power supplier, which has gone up 15 percent, and we’ve absorbed most of it until now.”
The San Isabel Electric Association, Inc. Board of Directors has approved a new rate design.
The decision was made at the Dec. 20, 2013 Board Meeting following the formal rate hearing.
The new rate structure includes changes to the access fee and energy charge as well as the consolidation of several rates into one residential rate class.
The cooperative will also begin using a declining block rate structure.
Effective Jan. 1, the basic residential rate will increase by an average of 9.5 percent, including a $20 per month access charge.
The new energy rate will go from 13.95 cents to 14 cents per kilowatt hour for the first 800 kWh used and 11 cents per kilowatt for all other energy used.
An additional 1 cent will be added per kWh during the months of June, July and August.
The rate increase is driven by the need to recover costs of providing services and an increase in wholesale power costs.
A cost of service study was completed in 2010 and in 2012 by a third-party consultant.
The study recommended the board and management consider revising the rate structure to recuperate costs of providing service.
The study showed that the current residential access charge of $8 per month was not adequately recovering basic costs of delivering electricity to SIEA members.
“No good deed goes unpunished,” he said.
San Isabel Electric Association has not had a rate increase since 2009.
“San Isabel is proud of the fact that the membership hasn’t had to increase rates over the past five years,” Rudolph said.
“But after absorbing wholesale power cost increases for the past several years, we are left with no other alternative but to raise rates.
“The Board of Directors is mindful of the economic conditions and people on fixed incomes.
“That was a driver in their decision to cut costs and hold rates as long as they have.
“But, when you look at it, we’re in a better situation than we were 10 year ago,” he added.
Within the last 12 years, he said the association experienced seven rate increases, and for a while, the increases occurred once a year.
“We’ve seen the costs go up, and we’ve been able to control those consts but the power supply that’s driving it purchased power that’s taking two-thirds of our budget,” he said.
However, he said, members have a say in what happens with the association as decisions to increase rates must be approved before the co-op board of directors.
For more information and a complete rate schedule, visit www.siea.com and click on the SIEA logo Rate 2014 icon on the left hand side of the page.
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